SUNIL KUMAR MUKKA,WARANGAL vs. DCIT., CENTRAL CIRCLE-2(1), HYDERABAD

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ITA 772/HYD/2025Status: DisposedITAT Hyderabad08 October 2025AY 2019-2014 pages
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What did the Tribunal hold?

The Tribunal held that the addition of Rs. 29,80,403/- as unexplained investment under Section 69 is sustainable. The seized document, while containing cash entries, also contained specific details like the assessee's name, plot number, size, and matching cheque entries with the sale deed. The Tribunal found this document to be a structured statement with corroborative value, not a random scrap, and distinguished it from the 'dumb document' cited by the assessee in CBI vs. V.C. Shukla. Therefore, the assessee could not selectively deny the cash components. Regarding the addition of Rs. 4,39,000/- claimed as gifts, the Tribunal directed its deletion. While acknowledging that equivalent cash deposits were made in the parents' accounts, the Tribunal noted that the assessee had provided an explanation identifying parents with known activities, and the Revenue had not disproved it with further verification. The reliance on Sadiq Sheikh vs. CIT was distinguished as the assessee in that case offered no explanation of capacity, unlike here. For ITA No. 775/Hyd/2025, the issues were identical to ITA No. 772/Hyd/2025 regarding the addition based on seized documents, and the Tribunal upheld the addition under Section 69.

What were the facts?

The appeals by Shri Sunil Kumar Mukka and Ms. Rapolu Kavitha for Assessment Year 2019-20 challenge separate orders of the CIT(A), Hyderabad. The assessee, Shri Sunil Kumar Mukka, originally filed a return of income of Rs. 5,50,670. During a search in the case of M/s. MSR India Ltd. and its director, documents related to the seller of a plot of land purchased by the assessee were found. The Assessing Officer (AO) noted a discrepancy between the sale deed consideration (Rs. 22,05,000) and the total consideration (Rs. 77,17,500). The AO issued a notice under Section 153C. Based on seized documents, the AO treated cash payments of Rs. 29,80,403 and alleged gifts of Rs. 4,39,000 as unexplained investment under Section 69, leading to an addition of Rs. 34,19,403. The CIT(A) upheld these additions. The second assessee, Ms. Rapolu Kavitha, also faced additions, with the AO making an addition of Rs. 25,00,000, partly due to unexplained investment in the same plot.

What were the issues?

1. Whether the addition of Rs. 29,80,403/- as unexplained investment under Section 69 of the Income Tax Act, 1961, based on a seized document, is sustainable when the assessee claims it is a 'dumb document' without signatures and lacks corroborative evidence, and the AO failed to discharge the burden of proof? - Assessee's contention: The addition is based on a loose sheet found from a third party, not seized from the assessee's premises, and lacks evidentiary value as per CBI vs. V.C. Shukla. No independent verification or corroboration was provided by the Revenue. - Revenue's contention: The seized document is a systematic record with specific linkages to the sale deed, including plot number, size, assessee's name, and payment details. The matching of cheque entries and other particulars with the sale deed implies the cash components are also part of the same transaction and cannot be selectively denied. 2. Whether the addition of Rs. 4,39,000/- (claimed as gifts from parents) as unexplained investment under Section 69 is sustainable, given the assessee's explanation of parents' business and tailoring incomes, and the AO's failure to conduct further inquiry? - Assessee's contention: The amounts were genuine gifts from parents whose incomes were from business and tailoring. The AO made no further inquiry and wrongly disbelieved the gifts. - Revenue's contention: The assessee failed to furnish evidence regarding the capacity of the parents to advance such amounts, similar to the situation in Sadiq Sheikh vs. CIT, where the SLP was dismissed against an order holding such gifts as unsubstantiated without evidence of capacity.

Which sections of the Income-tax Act were involved?

Section 69,Section 153C,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad

Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA

For Respondent: Dr. Sachin Kumar, SR-DR
Hearing: 16/09/2025

Heard together (2 matters)

ITA No.772/Hyd/2025
ITA No.775/Hyd/2025

Read from the judgment's own cause title. This page is filed under one of them.

per seized documents match with actual sale deed. When most of the particulars match with the sale deed, the inference is compelling that the cash entries also form part of the same transaction. The assessee’s reliance on the decision of Hon’ble Supreme Court in the case of CBI Vs. V.C. Shukla (supra) is distinguishable. That decision dealt with stray loose papers. Here, the document is not a random scrap but a structured statement, having linkage with the registered document, thus carrying corroborative value. Therefore, when most of the details of the seized document matches with the actual sale deed i.e. Plot number, size, assessee’s name and some part of sales consideration, the assessee cannot selectively deny the cash components of Rs.29,80,403/-. Accordingly, we uphold the findings of the lower authorities that cash payments of Rs.29,80,403/- represent unexplained investment.

10.

With regard to the addition of Rs.4,39,000/-, the assessee explained that the amount of Rs.3,50,000/- was received through bank transfers and Rs.89,000/- was received in cash from his father and mother, whose incomes were from business and tailoring work.

1.

It is correct that equivalent cash deposits were made in their bank accounts before transfer, but the assessee has furnished at least an explanation of their sources. The Ld. AO did not conduct any further enquiry or bring contrary evidence. The reliance of the Ld. DR on the decision of Hon’ble Supreme Court in the case of Sadiq Sheikh vs. CIT (supra) is distinguishable. In that case, the assessee offered no explanation regarding the capacity of creditors. However in the present case, the assessee has furnished an explanation, identifying the parents as sources with known activities, and the Revenue has not disproved it by further verification. In these facts, we hold that the addition of Rs.4,39,000/- cannot be sustained. The same is directed to be deleted.

12.

The assessee has raised the following grounds of appeal : made by Ld. AO on the basis of seized documents, wherein we have uphold the addition made by the Ld. AO under section 69 of the Act. Therefore, our discussion and findings in are mutatis mutandis applicable to this appeal also. Accordingly, we uphold the addition made by the Ld. Assessing Officer in this appeal also.

14.

In the result, the appeal of the assessee in is dismissed.

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